FERTILIZERS SUBSIDIES IN INDIA A CASE STUDY OF WEST ZONE

FERTILIZERS SUBSIDIES IN INDIA A CASE STUDY OF WEST ZONE Dr.RajwinderKaur (Assistant Professor, AGOI, Channo, Sangrur (Punjab), India) ABSTRACT The government of India is providing the subsidies on fertilizers since 1977 through the manufacturing industries. Hence, Indian government provides indirect subsidies to farmers for the purchase of fertilizers. In this paper, an attempt is made to analysis the growth and distribution of fertilizers subsidies in west zone of India. It is found that in west zone of Indian fertilizers subsidies are concentrated in a few states. The findings indicate that government should adopt some criteria for giving the fertilizers subsidies to different states. Keywords:Concentrated, Distribution, Fertilizers, Indirect, Subsidies. Corresponding Author:Dr.RajwinderKaur, Assistant Professor, AGOI, Channo, Sangrur (Punjab), India. INTRODUCTION The genesis of input subsidies in Indian agriculture can be traced to the philosophy and objectives of agricultural development strategy launched during the mid 1960s. Input subsidies helped in balancing the conflicting interests of farmers and consumers and in achieving macro and micro foodsecurity. Subsidies on fertilizers, electricity and canal water, which account for bulk of subsidies, have been analysed. In 1999 00, the electricity subsidy accounted for 53 per cent; fertilizer subsidy, 28 per cent; and canal irrigation subsidy, 19 per cent. During the last twenty years, 81 per cent of the incremental subsidy has been contributed by increase in the rate of per unit subsidy. Contrary to general perception, Punjab has accounted for only 7.4 per cent of the total subsidies in Indian agriculture. Across farm size groups distribution of subsidies has been found to follow the pattern of share of operated areas. The crop wise analysis has revealed that the input subsidies are mainly going to the food crops. The paper has suggested a caution in handling the issue of subsidies in Indian agriculture because the economic conditions of farmers have not improved to a desirable level. Subsidies on farm inputs cannot be seen in isolation of the subsidies in other sectors of the economy, which are many times more, and consequences of their withdrawal are less painful (Acharya S. S., Jogi R. L.) Governments in both developed and developing countries intervene in agriculture with a view to achieving a wide range of economic and social objectives. The reasons for government intervention are diverse and varied. Some of the oftcited reasons for

intervention are selfsufficiency, employment creation, support to smallscale producers for adopting modern technologies and inputs, reduction of price instability and improvement of the income of farm households. This intervention can take a number of forms such as importexport policies and domestic policies like price support programmes, direct payments, and input subsidies to influence the cost and availability of farm inputs like credit, fertilisers, seeds, irrigation water etc (Vijay Paul Sharma, HrimaThaker). GROWTH AND DISTRIBUTION OF FERTILZERS SUBSIDIES IN WEST ZONE This paper focuses primarily the distribution of fertiliser subsidy across regions especially in west zone. The fertilizers subsidies of different states of west zone in India during 198084 to 200809 are shown in table 1. This table indicates that Gujarat State has got Rs.31.27 crores of fertilizers subsidies in 198081, which have increased to Rs.262.67 crores in 199091 and further increased to Rs.6,974.23 crores in 200809. In Madhya Pradesh, these have increased from Rs.17.24 crores in 198081 to Rs.789.43 crores in 2000 01 and further increased to Rs.5,781.73 crores in 200809. Chhattisgarh has got Rs.328.87 crores and Rs.1,879.94 crores in 200506 and 200809 respectively. In Maharashtra, these have increased from 36.89 crores in 198081 to Rs.10,423.32 crores in 200809. In Rajasthan these have risen up at decreasing rate by 291.21 per cent, 197.19 per cent, 160.58 per cent, 51.94 per cent, 41.87 per cent 199091, 199697, 200001 except in 200809, it is 451.41 per cent as compared to 200506. Goa has received Rs. 0.36 crores in 198081, increased by 321.24 per cent in 1985.86 (from 198081) and further increased by 580.93 per cent in 200809 (from 200506). Dadra Nagar Haveli has received Rs.0.51 crores, Rs.0.76 crores, Rs.0.99 crores and Rs.4.47 crores in 199697, 200001, 200506 and 200809 respectively. As percentagewise analysis reveals that Maharashtra occupied topmost position among all the other states of the same zone throughout the study period. In Maharashtra, the percentage share has increased from 7.82 in 198081 to 12.60 in 199091 and declined to 10.30 in 200809. In Gujarat, it has declined from 6.63 per cent in 198081 to 4.91 per cent in 198586 and increased to 6.89 per cent in 200809, whereas the percentage share of subsidies have increased from 3.65 in 198081 to 6.51 in 199091 and declined to 5.71 in 200809 in Madhya Pradesh. Chhattisgarh has received 1.85 per cent and 1.86 per cent in 200506 and 200809 respectively. Rajasthan has enjoyed a little percentage share (2.51 per cent) in 198081, increased to 4.41 in 199697 and declined to 3.98 in 200001 and again increased to 4.36 in 200506. During study, it is found that Goa has got 0.08 per cent during 198081 to 198586 and 0.03 per cent during 200001 to 200809, whereas Dadra Nagar Haveli received 0.01 per cent and 0.004 per cent during 199697 to 200506 and 200809 respectively. Table 1 StateWise Distribution of Fertilizers Subsidies in West Zone in India during 198081 to 200809 (In Rs. Crores)

Years/ States West Zone 198081 198586 199091 199697 200001 200506 200809 Gujarat 31.27 88.54 262.67 417.54 616.78 1,124.51 6,974.23 (6.63) (4.91) (5.66) (5.12) (4.49) (6.33) (6.89) Madhya 17.24 90.77 302.08 499.44 789.43 826.61 5,781.73 Pradesh (3.65) (5.03) (7.77) (6.13) (5.75) (4.65) (5.71) Chhattisgarh 328.87 1,879.94 (1.85) (1.86) Maharashtra Rajasthan Goa Daman and Diu Dadra Nagar Haveli 36.89 140.62 489.87 682.27 1,353.38 1,729.37 10,423.32 (7.82) (7.79) (10.56) (8.37) (9.86) (9.73) (10.30) 11.84 46.42 137.97 359.51 546.26 774.96 4,273.22 (2.51) (2.57) (2.97) (4.41) (3.98) (4.36) (4.22) 0.36 1.51 2.90 3.08 4.80 4.85 33.02 (0.08) (0.08) (0.06) (0.04) (0.03) (0.03) (0.03) 0.18 0.21 1.58 (0.002) (0.002) (0.002) 0.57 0.76 0.99 4.47 (0.01) (0.01) (0.01) (0.004) Source: (1) Government of India, Fertilizers Association, Fertilizer Statistics, various issues, New Delhi. (2) Government of India, Economic survey, union Budget, various years. Note: (1) Fertilizers subsidies are calculated by multiplying the consumption of fertilizers (in 000 tonnes) with subsidy per tonne at national level (2) Percentages are shown in parentheses The fertilizer subsidies per hectare of different states of west zone in India during 198081 to 200607 are shown in table 2. Gujarat has got topmost rank during 198081 to 199697, as in the same state, these have increased from Rs.29.37 in 198081 to Rs.252.26 in 199091 and further increased to Rs.1,286.62 in 200607. Maharashtra has received Rs.18.28 in 198081, which have increased to Rs.223.03 in 199091 and further increased to Rs.3,243.73 in 200607. The fertilizers subsidies have increased from Rs.8.09 in 198081 to Rs.125.87 in 199091 and further increased to Rs.1,133.61 in 200607 in Madhya Pradesh. In Rajasthan, these have increased from Rs.6.85 in 198081 to Rs.70.83 in 199091 and further increased to Rs.301.60 in 200607, whereas indadra Nagar Haveli, these have gone up by 32.50 per cent in 200001 as compared to 199697. In Goa, fertilizers subsidies have increased from Rs. 25.59 in 198081 to Rs.404.74 in 200607, whereas in 200001 in Daman and Diu these have risen up by 16.12 per cent.

It is observed that Gujarat has got topmost position during 198081 to 199697 followed by Maharashtra, Goa, Madhya Pradesh, Chhattisgarh, Daman and Diu and Dadra Nagar Haveli. The percentage share has declined from 5.28 in 198081 to 4.58 in 198586 and increased to 5.10 in 199091 and again declined to 2.68 in 200001 in Gujarat. Madhya Pradesh's percentage share has increased from 1.46 in 198081 to 2.05 in 200001 and further increased to 2.36 in 200607. Maharashtra has got 3.29 per cent, 4.51 per cent, 2.86 per cent, 6.75 per cent in 198081, 199091, 200001 and 200607 respectively. The percentage share of Rajasthan at India level has increased from 1.23 in 198081 to 1.32 in 200001 and declined to 0.63 in 200607. In Goa, it has declined from 4.60 per cent in 198081 to 0.84 per cent in 200607, on the other hand it is found that the percentage share has declined from 199697 to 200001 in Daman and Diu and Dadra Nagar Haveli. West Zone Years/ States Gujarat Madhya Pradesh Table 2 Statewise distribution of Fertilizers Subsidies in West Zone in India during 198081 to 200607 (In Rs./ Hectare) 198081 198586 199091 199697 200001 200607 29.37 91.37 252.26 377.15 575.79 1,286.62 (5.28) (4.58) (5.10) (2.84) (2.68) (2.68) 8.09 39.41 125.87 202.97 440.86 1,133.61 (1.46) (1.97) (2.55) (1.53) (2.05) (2.36) Chhattisgarh Maharashtra Rajasthan Goa Daman Diu and 1,749.11 (3.64) 18.28 68.42 223.03 312.11 616.41 3,243.73 (3.29) (3.43) (4.51) (2.35) (2.86) (6.75) 6.85 25.58 70.83 172.64 283.49 301.60 (1.23) (1.28) (1.43) (1.30) (1.32) (0.63) 25.59 66.03 191.13 154.55 280.19 404.74 (4.60) (3.31) (3.86) (1.16) (1.30) (0.84) 262.29 304.57 (1.97) (1.42) Dadra Nagar 228.48 302.74 Haveli (1.72) (1.41) Source: (1) Government of India, Fertilizers Association, Fertilizer Statistics, various issues, New Delhi. (2) Government of India, Economic survey, union Budget, various years. (3) Government of Punjab, Statistical Abstract, Various years.

Note: (1) Fertilizers subsidies per hectare of states are calculated by multiplying the consumption of fertilizers (in Kgs) per hectare with subsidy per kg. (2) Percentages are shown in parentheses MAJOR FINDINGS AND POLICY IMPLICATIONS During research it is found that in all the states of west zone, the fertilizers subsidies in absolute terms has increased during post liberalisation period as compared to preliberalisation period. Whereas a lot of variation is seen in percentage share during the study period. As the year 200809 is compared to the year 199091 of preliberalisation period, it is found that in Rajasthan, the fertilizers subsidies have increased more than thirty times, in Gujarat twenty seven times, in Madhya Pradesh near about nineteen times and in Maharashtra these have risen up twenty one times. Maharashtra has got 1.86 times more of fertilizers subsidies in 199091 and 1.5 times in 200809 as compared to Gujarat. The fertilizers subsidies per hectare have been increased in the entire states of the west zone except in Goa throughout the study period, whereas percentage share analysis reveals a lot of variations. As the year 200607 is compared to the year 199091, in Maharashtra, these have increased the maximum i.e. fourteen times, whereas in Goa, it has increased minimum i.e. only two times. During preliberalisation period, Gujarat has got near about four times more of fertilizers subsidies as compared to Madhya Pradesh and Maharashtra near about three times as compared to Rajasthan, whereas during post liberalisation period (200607), Gujarat only 1.13 times more of fertilizers subsidies as compared to Madhya Pradesh and Maharashtra near about eleven times Rajasthan. The findings indicatethat fertiliser subsidy is concentrated in a few states of west zone, namely,maharashtra and Gujarat. Interstate disparity in fertiliser subsidy distributions still high though it has declined over the years. Rice, wheat,sugar cane and cotton account for about twothirds of the totalfertiliser subsidy. As result government should adopt some criteria to provide the fertilizers subsidies to states. REFERENCES [1] Acharya S. S., Jogi R. L., Farm input subsidies in Indian Agriculture, Agricultural Economics Research Review Year : 2004, Volume : 17, Issue : 1 pp11 41 [2] Vijay Paul Sharma, HrimaThaker, Fertiliser Subsidy in India: Who Are the Beneficiaries?,Economic and Political Weekly, Vol XLV No 12, March 20, 2010. [3] Government of Punjab, State Environment of Punjab 2005. [4] Government of Punjab, Statistical Abstract, Various Years [5] Government of India, Fertilizers Association, Fertilizer Statistics, various issues, New Delhi. [6] Government of India, Economic survey, union Budget, various years. [7] Halmandage, B.V. and Dr.N.N.Munde, A Study of fertilizer subsidy in India, International ResearchJournal, 1(7), 2010.